TIDMTNCI
RNS Number : 9519H
Tinci Holdings Ltd
23 May 2014
TINCI HOLDINGS LTD PRELIMINARY RESULTS
FOR THE 12 MONTHS ENDED 31 DECEMBER 2013
Tinci Holdings Ltd. ("Tinci", or the "Company", or the "Group"),
the AIM quoted China-based environmental engineering company, today
announces the Company's preliminary results for the twelve months
ended 31 December 2013 in accordance with International Financial
Reporting Standards (IFRS).
Financial Highlights:
-- Total revenue of RMB 99.3 million (2012 - RMB 56.3
million)
-- Profit before tax of RMB 1.66 million (2012 - Loss of RMB
2.90 million)
-- Profit after tax of RMB 0.37 million (2012 - Loss of RMB 2.96
million)
For further information, please visit www.tinciholdings.com or
contact:
Tinci Holdings Ltd
David Steeds, Chairman Tel: +44 (0)7836 578222
Joshua Cheng, Non-executive Director Tel: +1 512 577 4613
Westhouse Securities Limited
Martin Davison/ Hugo Rubinstein Tel: +44 (0) 20 7601 6100
About Tinci Holdings Limited
Tinci Holdings Ltd. is the parent company of Tinci Sanhe
Environmental Engineering Co. Ltd., an environmental engineering
company founded in October 2001, which is primarily involved in
developing, manufacturing and installing flue gas desulphurisation
(FGD) systems for reducing sulphur dioxide ("SO(2) ") emissions
from coal-fired power stations and large industrial boilers in
China.
Tinci is one of the leading privately owned FGD engineering
companies in Guangdong Province in Southern China. Tinci is the
only company in Guangdong Province capable of undertaking FGD
projects for small-, medium- and large-sized coal-fired electricity
plants.
Tinci is using its chemical engineering technical capabilities
to develop a portfolio of businesses and services around the
environmental engineering services sector and the speciality
chemical sector in China. The Company's shares are traded on the
AIM market of the London Stock Exchange under the symbol
'TNCI'.
Chief Executive Officer's Review
Overview of Operating Performance
I am pleased to present this annual report of Tinci covering our
2013 results and to outline our prospects for 2014.
The improvement in trading reported in the first half year of
2013 continued into the second half. However, tight price
competition and a thorough review of receivables restricted the
final result to a small profit before tax (2012 - a small
loss).
Overview of Operating Performance
The Company was successful in winning four projects in the very
competitive market in 2013 with a contract value of RMB113million,
compared to two projects and a total contract value of RMB66
million in 2013.
The Company's order book at the end of 2013 amounted to RMB70.1
million (2012: RMB56.2 million) and the pipeline of potential
orders ended the year at a reasonable level. During 2014 the
Company will continue to aim to increase sales and accelerate
receivable collection so as to maintain a good cash flow, in the
process laying a solid foundation for developing new projects and
businesses, particularly in the speciality chemicals sector.
New Project Developments
1. Co-Operation with China Oil on Catalytic Refining Project
We have won one technology contract for catalytic refining
projects valued RMB 0.8 million from Lanzhou China Oil and the
project was developed in the second half of 2012 with the customer,
one of China's major petrochemical companies. The progress so far
under the co-operation agreement with China Oil is
satisfactory.
2. Cooperation with Nan Fang Alkali
The Joint Venture with Nan Fang Alkali to develop a new project
utilizing waste alkali residue as the neutralizing agent for FGD
projects made good progress. More detail is given in note 13 to the
Accounts. The project with Nan Fang Alkali produced revenues of RMB
4.5 million and profits fo RMB872,000 in 2013 .
3. Investment in JiangSu AnDy
In 2012, the Company invested RMB 13.64 million for a 22.5%
stake in JiangSu AnDy Chemical and Pharmaceutical Co. Ltd.
("JiangSu AnDy"), a private company in Jiangsu Province in China
set up by Mr Kang Hongjie, its CEO and major shareholder. The funds
are being used to finance the development of JiangSu AnDy. The
management of JiangSu AnDy, led by Mr Kang, is well known to the
Tinci Board and has been successful in developing other chemicals
businesses. Tinci's Board and senior management are primarily
chemical engineers and this is a sector that they are familiar
with. I represent the Company on the Board of JiangSu AnDy for
which I do not receive any remuneration from JiangSu AnDy.
JiangSu AnDy is involved in research & development and
production and sale of chemical intermediates for the
pharmaceutical industry in China.
New Project Developments (cont'd)
3. Investment in JiangSu AnDy (cont'd)
In 2013 JiangSu AnDy had revenues of RMB53 million and a profit
for the year of RMB3.8 million (2012 - revenues of RMB 35 million
and profit of RMB 2.3 million). More details are given in note 12
to the Accounts. During 2013 the Company lent RMB4.75 million to
JiangSu AnDy.
4. Guangzhou Tiancheng Biodegradation Materials Co.,Ltd.
("GTBM")
During 2012 the decision was taken by the partners in GTBM to
wind down its operations because the technology could not be proven
to have the operational benefits for the production of
biodegradable plastics that had been hoped. During 2012 GTBM
returned RMB15 million of capital and repaid its current account of
RMB7.4 million with the Company. This represents the bulk of the
Company's investment in GTBM, the remainder of which will be
returned once all the closure formalities have been settled.
Financial Performance
The total business income in 2013 was RMB96.4 million, which is
74% higher than in 2012. The profit after tax was RMB 0.37 million
(compared to a loss of RMB 2.96 million in 2012).
Revenue increased during 2013 as the Company was able to win a
number of new orders against stiff competition because of its good
reputation in the FGD market. Receivables were substantially
unchanged while payables decreased from RMB 91.5 million in 2012 to
RMB 75.2 million in 2013. The cash position increased from RMB22.3
million in 2012 to RMB23.7 million in 2013.
Outlook
The Company expects FGD sales to again be steady in 2014 as it
adjusts its business direction focusing its FGD business in China
on the petrochemical sector.
The Company expects the investment in JiangSu AnDy will show a
further improvement in profits in 2014.
Cash flow is expected to be satisfactory in 2014 with end of
year balances ahead of 2013.
Staff and Management
I would like to thank all employees in the Company for their
hard work towards the development of the Company. I am also
grateful to our shareholders for their ongoing support and
understanding.
XU Jinfu
Chief Executive Officer
23 May 2014
Tinci Holdings Limited
Consolidated Income Statement
Year ended 31 December 2013
Note 2013 2012
RMB'000 RMB'000
Turnover 2 96,375 55,275
Other income 2 2,887 1,043
--------- ---------
99,262 56,318
Raw material and consumables used (78,905) (41,356)
Staff costs and staff benefits
expenses (8,559) (8,351)
Depreciation and amortisation expense (1,217) (1,137)
Other operating expenses (10,075) (8,705)
--------- ---------
Profit/(loss) from operations 506 (3,231)
Exchange gain/(loss) 8 (114)
Finance costs - (84)
Share of profit of an associate 856 519
Share of losses of a jointly controlled
entity 287 13
--------- ---------
Profit/(loss) before taxation 3 1,657 (2,897)
Taxation 4 (1,290) (62)
--------- ---------
Profit/(loss) for the year 367 (2,959)
Attributable to:
Shareholders of the Company 367 (2,959)
RMB Cents RMB Cents
Earnings/(loss) per share (basic
and diluted) 5 1 (6)
Tinci Holdings Limited
Consolidated Statement of Comprehensive Income
Year ended 31 December 2013
2013 2012
RMB'000 RMB'000
Profit/(loss) for the year 367 (2,959)
Other comprehensive (loss)/income
- Currency translation adjustments (36) 6
------- -------
Total comprehensive income/(loss)
for the year 331 (2,953)
------- -------
Total comprehensive income/(loss)
attributable to:
Shareholders of the Company 331 (2,953)
======= =======
Tinci Holdings Limited
Consolidated Statement of Financial Position
Year Ended 31 December 2013
2013 2012
Note RMB'000 RMB'000
Assets
Non-current assets
Land use rights 357 369
Property, plant and equipment 10,518 10,474
Intangible assets 1,244 1,555
Interest in associates 17,863 17,007
Interest in a jointly controlled
entity 1,179 892
Deferred tax assets 5,135 4,965
--------- ---------
Total non-current assets 36,296 35,262
--------- ---------
Current assets
Amount due from customers for
contract work 13,545 15,802
Trade and other receivables, deposits
and prepayment 160,322 160,679
Derivative financial instruments - 17
Restricted bank balances 6,398 13,041
Cash and bank balances 23,675 22,277
--------- ---------
Total current assets 203,940 211,816
--------- ---------
Total assets 240,236 247,078
--------- ---------
Liabilities
Current liabilities
Amount due to customers for contract
work 5,870 -
Derivative financial instruments 33 -
Trade and other payables 75,154 91,478
Bills payable 17,354 14,705
Current income tax liabilities 877 278
--------- ---------
Total current liabilities 99,288 106,461
--------- ---------
Net assets 140,948 140,617
========= =========
Equity
Share capital 6 7,796 7,796
Share premium 18,078 18,078
Other reserves 43,155 43,200
Retained earnings 71,919 71,543
--------- ---------
Total shareholders' equity 140,948 140,617
========= =========
Tinci Holdings Limited
Consolidated Statement of Changes in Equity
Year ended 31 December 2013
Share Reverse
Share Share options acquisition Retained Translation
capital premium reserve reserve earnings reserve Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Balance at 1 January
2012 7,796 18,078 819 42,644 74,485 (252) 143,570
Forfeiture of share
options
- previously granted
to employees - - (17 ) - 17 - -
Total comprehensive
loss for the year - - - - (2,959 ) 6 (2,953 )
Balance at 31 December
2012 7,796 18,078 802 42,644 71,543 (246) 140,617
Forfeiture of share
options
- previously granted
to employees - - (9 ) - 9 - -
Total comprehensive
income for the
year - - - - 367 (36 ) 331
Balance at 31 December
2013 7,796 18,078 793 42,644 71,919 (282) 140,948
Tinci Holdings Limited
Consolidated Statement of Cash Flows
Year ended 31 December 2013
2013 2012
RMB'000 RMB'000
------------------------------------------------ -------- -------
Cash flows from operating activities
------------------------------------------------ -------- -------
Profit/(loss) before taxation 1,657 (2,897)
Adjustments for:
Interest income (1,233) (36)
------------------------------------------------ -------- -------
Interest expenses - 84
------------------------------------------------ -------- -------
Bad debts written off and provision
for doubtful debts 4,024 2,476
------------------------------------------------ -------- -------
Depreciation and amortisation expense 1,217 1,137
------------------------------------------------ -------- -------
Unrealised loss on derivative financial
instruments 50 28
------------------------------------------------ -------- -------
Share of profit of an associate (856) (519)
------------------------------------------------ -------- -------
Share of losses of a jointly controlled
entity (287) (12)
------------------------------------------------ -------- -------
Operating profit before changes in
working capital 4,572 261
------------------------------------------------ -------- -------
Decrease in amount due from customers
for contract work 2,257 3,540
------------------------------------------------ -------- -------
Decrease in trade and other receivables,
deposits
and prepayment 160 4,185
------------------------------------------------ -------- -------
Increase/(decrease) in amount due
to customers for
contract work 5,870 (57)
------------------------------------------------ -------- -------
(Decrease) in trade and other payables (16,324) (2,071)
------------------------------------------------ -------- -------
Increase in bills payable 2,649 12,822
------------------------------------------------ -------- -------
Cash (used in)/generated from operations (816) 18,680
------------------------------------------------ -------- -------
Interest received 156 36
------------------------------------------------ -------- -------
Interest paid - (84)
------------------------------------------------ -------- -------
Current income tax paid (861) (466)
------------------------------------------------ -------- -------
Net cash (used in)/generated from operating
activities (1,521) 18,166
------------------------------------------------ -------- -------
Cash flows from investing activities
------------------------------------------------ -------- -------
Purchases of property, plant and equipment (938) -
------------------------------------------------ -------- -------
Investment in an associate - 15,190
------------------------------------------------ -------- -------
Repayment of loan to an associate - 7,420
------------------------------------------------ -------- -------
Advance to an associate (4,750) -
------------------------------------------------ -------- -------
Net cash (used in)/generated from investing
activities (5,688) 22,610
------------------------------------------------ -------- -------
Cash flows from financing activities
------------------------------------------------ -------- -------
Loan to a related party - (15,000)
------------------------------------------------ -------- -------
Repayment of loan to a related party 2,000 -
------------------------------------------------ -------- -------
Movement in restricted bank balances 6,643 (10,734)
------------------------------------------------ -------- -------
Net cash generated from/(used in) financing
activities 8,643 (25,734)
------------------------------------------------ -------- -------
Net increase in cash and cash equivalents 1,434 15,042
------------------------------------------------ -------- -------
Cash and cash equivalents as at 1 January 22,277 7,229
------------------------------------------------ -------- -------
Effect of foreign exchange rates changes
- net (36) 6
------------------------------------------------ -------- -------
Cash and cash equivalents as at 31
December 23,675 22,277
------------------------------------------------ -------- -------
ANALYSIS OF CASH AND CASH EQUIVALENTS
Cash and bank balances 23,675 22,277
------------------------------------------------ -------- -------
Tinci Holdings Limited
Notes to consolidated financial statements
1. FINANCIAL INFORMATION
The financial information set out in this announcement does not
constitute the Company's statutory accounts for the years ended 31
December 2013 or 2012. The statutory accounts for the year ended 31
December 2013 will be finalised on the basis of the financial
information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of
Companies.
2. TURNOVER, OTHER INCOME AND SEGMENTAL REPORTING
The principal activities of the Group during the year were
developing, selling and installing large-scale flue gas
desulphurisation equipment to power stations.
For the years ended 31 December 2013 and 2012, the Group
comprised only one business and one geographical segment.
Turnover for the year is wholly attributable to construction
contract revenue for activities undertaken in China. An analysis of
the Group's other income is set out below:-
Other income
2013 2012
RMB'000 RMB'000
--------------------------------------- ---------------- -----------
Rental income, net of tax 976 795
--------------------------------------- ---------------- -----------
Interest income 1,233 36
--------------------------------------- ---------------- -----------
Net gain from derivative financial
instruments - 6
--------------------------------------- ---------------- -----------
Miscellaneous 678 206
--------------------------------------- ---------------- -----------
2,887 1,043
--------------------------------------- ---------------- -----------
3. PROFIT/(LOSS) BEFORE TAXATION
2013 2012
The profit/(loss) before taxation is arrived at after charging:- RMB'000 RMB'000
------------------------------------------------------------------ ----------- -----------
Auditor's remuneration 353 372
------------------------------------------------------------------ ----------- -----------
Staff costs
------------------------------------------------------------------ ----------- -----------
- Salaries and allowance 7,657 7,461
------------------------------------------------------------------ ----------- -----------
- Contribution to defined contribution retirement plans 623 743
------------------------------------------------------------------ ----------- -----------
- Other benefits 279 147
------------------------------------------------------------------ ----------- -----------
8,559 8,351
------------------------------------------------------------------ ----------- -----------
Research and development expenses 592 541
------------------------------------------------------------------ ----------- -----------
Amortisation of land use rights 12 12
------------------------------------------------------------------ ----------- -----------
Depreciation 894 814
------------------------------------------------------------------ ----------- -----------
Amortisation of intangible assets 311 311
------------------------------------------------------------------ ----------- -----------
Bills discounting interest - 84
------------------------------------------------------------------ ----------- -----------
Bad debts and provision for doubtful debts 4,024 2,476
------------------------------------------------------------------ ----------- -----------
Net loss/(gain) from derivative financial instruments 165 (6)
------------------------------------------------------------------ ----------- -----------
4. TAXATION
The Group is subject to income tax on an entity basis on profits
arising in or derived from the jurisdictions in which the Group
entities are domiciled and operate.
In 2011, Guangzhou Tinci was recognised as a "New High-tech
Enterprise". Qualified enterprises are entitled to preferential tax
benefits, including a reduced rate of enterprise income tax ("EIT")
of 15% for at least 3 years. Accordingly, Guangzhou Tinci was
subject to a reduced EIT rate of 15% for the fiscal years 2011 to
2013.
The Group is also subject to Hong Kong Profits Tax through the
Company and its subsidiary, World International. No provision for
Hong Kong Profits Tax has been made as the Company and World
International had no taxable income. The statutory rate of
corporate tax in Hong Kong is 16.5% (2012: 16.5%).
2013 2012
The tax charge comprises: RMB'000 RMB'000
-------------------------------------------- ----------- -----------
Current tax
PRC EIT
-------------------------------------------- ----------- -----------
- Current tax provided for the
year 1,217 563
-------------------------------------------- ----------- -----------
- Under-provision in prior years 243 -
-------------------------------------------- ----------- -----------
1,460 563
-------------------------------------------- ----------- -----------
Deferred taxation (note 20):
Recognition and reversal of temporary
difference (170) (501)
-------------------------------------------- ----------- -----------
1,290 62
-------------------------------------------- ----------- -----------
Deferred tax has been recognised in the financial statements due
to revenue and expenses recognised for financial reporting purposes
before being recognised for tax purposes.
A reconciliation between tax expense and accounting
profit/(loss) before taxation using the EIT rate is
as follows:-
2013 2012
RMB'000 RMB'000
--------------------------------------------- ----------- -----------
Profit/(loss) before taxation 1,657 (2,897)
--------------------------------------------- ----------- -----------
Calculation at the effective EIT rate of
25% (2012: 25%) 414 (724)
--------------------------------------------- ----------- -----------
Non-deductible expenses for tax purpose 1,215 1,430
--------------------------------------------- ----------- -----------
Income not subject to tax purpose (113) (490)
--------------------------------------------- ----------- -----------
Tax concession (469) (154)
--------------------------------------------- ----------- -----------
Under-provision of tax in prior years 243 -
--------------------------------------------- ----------- -----------
Tax expense for the year 1,290 62
--------------------------------------------- ----------- -----------
5. EARNINGS PER SHARE
Basic earnings/(loss) per share
Basic earnings/(loss) per share are calculated by dividing the
profit attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the
year.
2013 2012
------------------------------------- ------------ ------------
Profit/(loss) attributable to equity
holders of the Company (RMB'000) 367 (2,959)
------------------------------------- ------------ ------------
Weighted average number of ordinary
shares in issue 52,950,041 52,950,041
------------------------------------- ------------ ------------
Earnings/(loss) per share (RMB Cents
per share) 1 (6)
------------------------------------- ------------ ------------
Diluted earnings/(loss) per share
The Company has one category of dilutive instrument - share
options.
None of the share options of the Company in issue had a dilutive
effect on the basic earnings/(loss) per share as the exercise price
is above the share price quoted in the AIM market throughout the
year. So they are considered as anti-dilutive and have not been
included in the diluted earnings/(loss) per share calculation for
the years ended 31 December 2013 and 2012.
6. SHARE CAPITAL
2013 2012
GBP GBP
------------------------------------------ ------------- -------------
Authorised:
140,000,000 ordinary shares of GBP0.01
each 1,400,000 1,400,000
------------------------------------------ ------------- -------------
RMB RMB
------------------------------------------ ------------- -------------
Issued and fully paid:
52,950,041 ordinary shares of GBP0.01
each 7,795,574 7,795,574
------------------------------------------ ------------- -------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GMGZKZFKGDZM
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